In the run-up to the company’s announcement of topline results from its Phase 2b trial of COMP360 psilocybin therapy for treatment-resistant depression (TRD), COMPASS published a flurry of press releases as the stock price appreciated. Upon publication of the topline results on November 9th, 2021, however, the stock price took a sharp turn for the worse. This downward movement was significant, with trading volume spiking to over 10,000,000 on the day of the news: a level that far exceeds any other trading day.
Given that almost all psychedelics companies are pre-revenue, with very concentrated bets on just one lead candidate (or, one lead molecule with a small number of variations), it’s clear that clinical trial readouts can have significant consequences for this category.
Whether investors’ reactions to the events marked on the company’s stock price chart above were rational or proportional is the subject of much debate.
